CAC to shut down unregistered PoS businesses after September deadline

• Published On: 06 September 2024 at 18:51

The Corporate Affairs Commission has announced that it will begin taking stringent actions, including closing down Point of Sale businesses that did not comply with its registration requirement by September 5th.

This was disclosed in a public notice issued on Friday.

The CAC stated that compliance levels have been insufficient and warned that non-compliant businesses may be engaging in "unwholesome activities."

This announcement comes after the Association of Mobile Money and Bank Agents in Nigeria filed legal challenges, claiming that the CAC's registration mandate is illegal.

The dispute highlights ongoing tensions between regulatory authorities and fintech operators in the country.

The CAC issued a public notice reminding Fintech and POS operators that the 60-day registration deadline from July 7, 2024, expired on September 5, 2024.

"When considering the large number of POS operators in the country, the Commission notes inadequate compliance with the formalisation directive. Those who have taken steps to formalise in accordance with the Commission's directive deserve recognition for their positive attitudes.

"Recalcitrant operators have refused to follow the advice for formalisation, possibly due to involvement in unethical activities or for reasons best known to them.

"We are to make it clear that the Commission is working with Law Enforcement Agencies and other relevant stakeholders to deploy comprehensive enforcement and sanction framework that may include not only possible shutdown but other severe legal Consequences."

Recall that the CAC announced in May that PoS agents for major Nigerian fintechs such as OPay, Palmpay, and Moniepoint, among others, had until July 7, 2024, to register their businesses.

Hussaini Magaji, the Registrar-General of CAC, announced that the decision to take action against non-compliant Point of Sale (PoS) businesses stems from an agreement reached with PoS operators at a recent meeting in Abuja.

Magaji emphasised that the registration mandate is consistent with both legal requirements and directives from the Central Bank of Nigeria.

However, AMMBAN claims that the CAC's registration requirements violate the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which states that the Commission lacks jurisdiction over individuals who do not operate as companies.

AMMBAN National General Secretary Oluwasegun Elegbede stated that the case is currently before the court, with hearings scheduled for September.

"The court will have to intervene in the interpretation of the quoted section of the CAMA if individuals operating as a sub-agent (likened to a bank branch) must register with CAC," the attorney general said.

The CAC's directive on PoS business registration comes as there have been an increase in incidents of fraud involving PoS terminals, as well as the CBN's ongoing plans to halt cryptocurrency and other virtual currency trading.